Use the drop-down menus to answer the questions. In this circular flow mode, what does the letter A present? What does the letter B represent? What does the letter C represent? What does the letter D represent?

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Answer:

Letter A represents the financial sector. The financial sectors channels private savings into investments.

Letter B represents the government sector. Governments finance their spending through taxes and public debt.

Letter C represents the foreign sector. Net exports = exports - imports.

Letter D represents leakages, or money that exits the economy reducing total expenditure.

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The best representations of the information which was shown in the circular flow mode is:

  • Letter A represents the financial sector.  
  • Letter B represents the government sector.  
  • Letter C represents the foreign sector.  
  • Letter D represents leakages, or money that exits the economy reducing total expenditure.

According to the given question, we are asked to show the best representations of the information which was shown in the circular flow mode.

As a result of this, we can see that from the complete diagram, there is a collection of words which shows the things which relates to both the financial sector, the government sector, etc

Read more about government sector here:

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